Stacey E. Pickering Mississippi State Auditor Stacey E. Pickering Mississippi State Auditor

Stacey E. Pickering

Mississippi State Auditor

Stacey E. PickeringMississippi State Auditor

GASB 68 & 71, PERS and the Impact on Mississippi Entities

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Financial statements prepared using the economic resources measurement focus and accrual basis of accounting are required to recognize a liability for the proportionate share of the net pension liability

Pension expense and deferred outflows of resources and deferred inflows of resources related to pensions must also be recorded

Plan amounts along with proportionate share percentages will be provided by PERS – All other amounts will have to be calculated

Additional disclosures and supplemental schedules are required

Summary

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Statement No. 68 and Statement No. 71 are effective for employers and governmental nonemployer contributing entities in fiscal years beginning after June 15, 2014 (that is, for years ended June 30, 2015 or later)

Measurement Date can be no earlier than the end of the employer’s prior fiscal year, consistently applied from period to period (GASB 68, Paragraph 48)

Employers with a June 30, 2015 (Public School Districts and Community Colleges), year-end will use 2014 PERS GASB 68 Resources for Employers Reports

Employers with a fiscal year-end reporting date after July 1, 2015 (Counties), will use 2015 PERS GASB 68 Resources for Employers Reports (Will be available by December 31, 2015)

Reporting Date

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http://www.pers.ms.gov/Pages/Home.aspx

Where to Find the Data for the Calculation



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Resources

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Auditor’s 2013/2014 Report (Schedule of Employer Allocations

and Schedule of Collective Pension Amounts)

Total Plan Net Pension Liability

Total Plan Deferred Inflows and Outflows

Total Plan Pension Expense Average Remaining Service

Life Sensitivity Analysis Disclosure Information

Total Plan Net Pension Liability

Total Plan Deferred Inflows and Outflows

Total Plan Pension Expense Average Remaining

Service Life Sensitivity Analysis Disclosure Information

Proportionate Share

Actuary’s 2014 Report(Report of the Annual GASB

Statement No. 68

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PERS calculated the employer allocation percentage so that each entity would have a portion

This resulted in the percentages going out 6 decimal places

Management may round the proportionate share to fewer decimal places, at their discretion

The advantage to rounding is that it should help reduce changes in proportionate share in future years

Proportionate Share

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Remove the net position obligation (asset) balance determined in accordance with Statement 27, as amended, if any, and any payables to the pension plan, associated with formal commitments

Add the balance of the net pension liability (or proportionate share of the collective net pension liability), if any, as of the beginning of the initial period of implementation

Add a deferred outflows of resources balance for the government’s contributions to the pension plan made between the measurement date and the beginning net pension liability and the beginning of the entity’s fiscal year, if any

Add balances associated with all other deferred outflows of resources and deferred inflows of resources, if applicable

Components of Prior Period Adjustment

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This spreadsheet is a tool originally prepared for internal use by the Office of the State Auditor and now provided as a template to assist in the pension calculations relating to GASB 68. It is applicable only in the year of implementation for entities with a year end of 6/30/15 or prior. Subsequent years will require additional calculations not addressed in the spreadsheet. The Office of the State Auditor assumes no responsibility for the content of this spreadsheet or for any errors or omissions related to its use. Each entity will have unique and different circumstances that may require revisions and/or additions to this template. The understanding and implementation of GASB 68, accuracy of the calculations, and recording of the applicable journal entries are the responsibility of management of the entity.

Disclaimer

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Example Information

Measurement Date June 30, 2014

Employer Fiscal Year End June 30, 2015

Proportionate Share from PERS 0.461324%

2014 Proportionate Share Rounded 0.46%

2013 Proportionate Share Rounded 0.46%

Employer contributions subsequent to the measurement date (Contributions from July 1, 2014-June 30, 2015)

$5,000,000

Employer contributions during fiscal year 2014 (Contributions from July 1, 2013 – June 30, 2014)

$4,460,501

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Example Template - Summary

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Example Template – Deferred Outflows

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Example Template – Deferred Inflows

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Example Template – Pension Expense

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Example Template – Sensitivity Analysis

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Example Template - Journal Entries

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Example Template – Journal Entries

*The entry should be a debit to deferred outflows - pensions and a credit to cash/payable. The way that the contributions subsequent to the measurement date were initially recorded during the year will dictate the credit side of the entry. The initial debit entry will need to be reversed to properly reflect the amount of deferred outflows. This entry will vary by entity. (Will be closed out to net pension liability in the subsequent year.)

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Recognition on the Statement of Net Position and Statement of Activities

Additional note disclosures Supplementary Schedules

Schedule of the District’s Proportionate Share of the Net Pension Liability

Schedule of District Contributions

Changes to Report

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GASB 68, Accounting and Financial Reporting for Pensions

GASB 71, Pension Transition for Contributions Made Subsequent to the Measurement Date

GASB 68 Implementation Guide AICPA Whitepaper – Governmental

Employer Participation in Cost-Sharing Multiple-Employer Plans: Issues Relating to Information for Employer Reporting

Other Implementation Resources

Documents

Stacey E. Pickering Mississippi State Auditor Stacey E. Pickering Mississippi State Auditor